Who are Patent Trolls?

A Patent Trolls is a company that acquires a lot of patents without the desire to actually develop the products or supply services based upon the patents in question. Instead of making money from the product or service, the company launches a large amount of patent infringement lawsuits. The sole purpose of a patent troll is to identify infringers and sue them. These patents are not always write well but are confuse, unclear and generic to cover more possible applications. The preferred victims are Start up. They are the most vulnerable subjects because of limited financial resources  to start a long legal battle. So the subjects involved in a legal dispute don’t start a process but they prefer a financial agreement.

HalloweenPatentTroll

“One example can be Intellectual Ventures, a Npe which stands for “non-practicing entities”. Its business model has a focus on buying patents and aggregating them into a large patent portfolio and licensing these patents to third parties. Publicly, it states that a major goal is to assist small inventors against corporations. In practice, the vast majority of IV’s revenue comes from buying patents, aggregating these patents into a single portfolio spanning many disparate technologies and tying these patents together for license to other companies under the threat of litigation, or filing lawsuits for infringement of patents. Intellectual Ventures launched a prototyping and research laboratory in 2009 called Intellectual Ventures Lab, hiring prominent scientists to imagine inventions which could exist but do not yet exist, and then filing descriptions of these inventions with the US Patent Office.” [1]

This kind of company has few things to lose and much to gain in a legal battle, because can block the production of others, but it doesn’t have nothing that can be attacked and it has low costs because it doesn’t have products to be realized.

Patent Trolls can be also companies that have products and services, in this case the generic and unclear patent is written to create an obstacle to some competitor.  One example can be the long legal battle between Apple and Samsung started from some issue about Smartphone shape.

“In short, the court ruled that Apple’s complaint over Samsung’s infringement of certain design features (such as the “rounded rectangle” shape of smartphones) was valid, and that this infringement entitled Apple up to full profits damages despite the fact that these patents are irrelevant to customers’ purchasing decisions. This is an extremely troubling precedent to set, as it means that basic elements of design, such as shapes, can be patented and used as the basis for extremely costly lawsuits.” [2]

The patent law born in Italy  (Venice) in 1474 to give rights to inventors and promote the innovation to make Venice the first center in the world for the silk production process today with patent trolls is becoming an obstacle to innovation and an instrument for big companies to hold their position in the market. All these problems are more evident in U.S. than in Europe because Europe has a loser pays costs regime instead in U.S. where each party is responsible for paying its own attorney’s fees.

[1] https://en.wikipedia.org/wiki/Intellectual_Ventures

[2] http://thehill.com/blogs/pundits-blog/finance/243594-apple-v-samsung-court-ruling-puts-small-businesses-at-risk

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